How Safe Are Wal-Mart’s Overseas Factories?
How safe are Wal-Mart’s Overseas Factories? This is the question that has come into play after 112 workers in a garment factory in Bangladesh died in a fire recently. Wal-Mart was aware of safety issues at the factory for a while, but still continued to use the factory to manufacture clothes for Wal-Mart. Wal-Mart said that a supplier continued to use the factory, against its wishes.
Labor activists contend that retailers, such as Wal-Mart, have a responsibility to make sure that these overseas factories that manufacture their products work in a safe environment. The safety record for this industry is horrific. Since 2006, more than 300 workers have died in Bangladesh in factory fires.
Survivors said that exit doors were locked, and a fire official said that the death rate would have been lower if there was an emergency exit. The fire broke out on the ground floor, and parts of the stairway was blocked by layers of clothing and yarn. According to one worker, when workers tried to flee the building, they were informed to go back to their work stations.
Bangladesh has about 4,000 garment factories that make clothes for international brands. The country earns about $20 billion annually from overseas clothing sales, roughly 80 percent of its exports.
Work conditions at the country’s garment factories are notoriously poor. According to Voa News at least 500 people have died in Bangladesh in garment factory accidents and fires since 2006. Activists say plant owners are rarely prosecuted for poor safety conditions.
There is the pressure that consumers put on the retailers to offer lower prices, so in instances like this, the factories cut corners in order to do so.
Harold Meyerson at the Washington Post wrote of the fire and these corporate excuses in a poignant column:
In its gruesome particulars — locked doors, no emergency exits, workers leaping to their deaths — the blaze seems a ghastly centennial reenactment of the Triangle Shirtwaist fire of 1911, when 146 workers similarly jumped to their deaths or were incinerated after they found the exit doors were locked. …
If this were an isolated incident of Wal-Mart denying responsibility for the conditions under which the people who make and move its products labor, then the Bangladeshi disaster wouldn’t reflect quite so badly on the company. But the very essence of the Wal-Mart system is to employ thousands upon thousands of workers through contractors and subcontractors and sub-subcontractors, who are compelled by Wal-Mart’s market power and its demand for low prices to cut corners and skimp on safety. And because Wal-Mart isn’t the employer of record for these workers, the company can disavow responsibility for their conditions of work.
This system isn’t reserved just for workers in faraway lands: Tens of thousands of American workers labor under similar arrangements. Many are employed at little more than the minimum wage in the massive warehouses in the inland exurbs of Los Angeles, where Wal-Mart’s imports from Asia are trucked from the city’s harbor to be sorted and packaged and put on the trucks and trains that take them to Wal-Mart stores for a thousand miles around. …
Other discount retailers — notably Costco and Trader Joe’s — pay their workers far more, train them more extensively, have much lower rates of turnover and much higher rates of sales per employee, according to a Harvard Business Review article by Zeynep Ton of the MIT Sloan School of Management. Costco is a very profitable business, but Wal-Mart maintains an even higher profit margin, which it achieves by underpaying its employees. The conservative economic blogger Megan McArdle estimates that if Wal-Mart held its profit margin down to Costco’s level, its average worker would make about $2,850 more each year — a considerable increase in a sector where workers’ earnings average less than $25,000 a year. But Wal-Mart neither pays its own nor takes responsibility for those who make and move its wares.
For America’s largest private-sector employer, the emergency exits are always open.